This relatively small naval battle is historically important as it marked the beginning of the end of Portugal's commercial monopoly over India, and the beginning of the ascent of the English East India Company's presence in India.

This battle also convinced the English East India Company to establish a small navy to safeguard their commercial interests from other European powers and also from pirates. This small beginning is regarded as the root of the modern Indian Navy.

This battle was the result of the Portuguese monopoly over trade with India in the late-15th and 16th centuries. Two English ventures, The Company of Merchant Adventurers (established 1551) which became the Muscovy Company in 1555, and the English East India Company also known as "John Company", (established 1600) were desperately attempting to find routes to the East Indies and the spice trade. The following three individuals played a key part in the events leading up to this battle:

The Portuguese guarded their new-found routes to Asia very well. During July, 1583 an English merchant, Ralph Fitch was arrested for spying at Ormuz (near the modern Iranian port of Bandar Abbas). He was on a voyage from Syria to the Indian Ocean in his ship,Tiger, via what is now Iraq using the Euphrates river. Ralph was presented before the Portuguese Viceroy in Goa where he was placed under arrest. He was released on the surety provided by Jesuit priests, but escaped from Goa and wandered around India for the next decade. He returned to England in 1591, and became a valuable consultant for the Company.

Jan Huyghens van Linschoten (1563–1611) was a Dutch Protestant traveller and historian who also served as the Portuguese Viceroy's secretary in Goa between 1583 and 1588. He returned to Holland in 1592. He published a book, Itinerario in 1596 (later published as an English edition as Discours of Voyages into Y East & West Indies) which graphically displayed for the first time in Europe, detailed maps of voyages to the East Indies, particularly India. During his stay in Goa, abusing the trust put in him by the Viceroy, Jan Huyghens meticulously copied the top-secret charts page-by-page. Even more crucially, Jan Huyghens provided nautical data like currents, deeps, islands and sandbanks, which was absolutely vital for safe navigation, along with coastal depictions to guide the way.

His publications were also responsible for the establishment of the Dutch East India Company (Vereenigde Oostindische Compagnie) in 1602 to unify Dutch efforts at trade with Asia.

Captain William Hawkins led the first voyage of the English East India Company to India and sailed into the Gujarat port of Surat on 24 August 1608. He had with him 25,000 pieces of gold and a personal letter to the Mughal Emperor Jehangir (sometimes also rendered as Cehangir or Ichan Guire) from King James I seeking trade concessions. He persisted for over two years, however Portuguese pirates stole his gold, and tried several times to murder him while on shore. He returned to England empty-handed. The next envoy, Paul Canning, lasted only a few months.

The initial voyages of the English East India Company were not necessarily to India. Each voyage was almost a venture in itself, separately funded by issuance of subscription stock. An eighth voyage was led in 1611 by Captain John Saris to Japan. The ninth voyage (February 1612 – August 1615) was to India and Sumatra.

The tenth voyage (1612–1614) on behalf of the English East India Company was led by Captain Thomas Best. It set out from Gravesend on 1 February 1612 passing via the present day Trinidad[citation needed], then Daman on 3 September 1612 eventually reaching Surat on 5 September 1612. Surat was the principal port for the Mughals, and was then situated at the mouth of the river Tapti.

Coincidentally, on 13 September 1612 a squadron of 16 Portuguese barks sailed into Surat. On 22 September 1612 Captain Best decided to send an emissary to the Emperor asking for permission to trade and settle a factory at Surat. If refused he planned to quit the country.[1] This may have been partly because King James I had extended the Company's charter in 1609 on the basis that it would be cancelled if no profitable ventures were concluded within three years.

On 30 September 1612 Captain Best got news that two of his men, Mr Canning (the purser) and William Chambers were arrested while on shore. Fearing the worst, Captain Best detained a ship belonging to the Governor of Gujarat and offered to release it in exchange for his men.

On 10 October Captain Best and his ships sailed to Suvali, a small town about 12 miles (19 km) North of Surat. This may have been because the Governor (Sardar Khan?) was battling a Rajput rebellion at a fort situated in the town. Between 17–21 October, amidst negotiations he managed to obtain a treaty with the Governor allowing trading privileges, subject to ratification by the Emperor.

On 27 November, Captain Best was advised by his men on shore that a squadron of four Portuguese ships was sailing up to attack him.

The Portuguese ships (four great galleons and some twenty-six oared barks) arrived on the 28th, and anchored outside the roadstead placing the English vessels between themselves and the town.

A skirmish took place between the two navies on the 29th without much damage to either side.

At daylight on 30 November, Captain Best in Red Dragon sailed through the four larger Portuguese ships running three of them aground, and was joined by Hosiander on the other side. The Portuguese managed to get the three galleons refloated.

At 9pm that night in an attempt to set the English ships alight, a bark was sent towards them as a fire ship. But the English watch was alert, and the bark was sunk by cannon fire with the loss of eight lives.

A standoff remained until 5 December, when Captain Best sailed for the port of Diu.

On 6 January 1613, Captain Best received a letter from the Emperor ratifying the treaty, which was presented by the Governor. Captain Best then ordered one of his men, Anthony Starkey, on 16 January to leave for England, via land, carrying letters of their success. Mr Starkey was later poisoned by two Jesuit friars.

Captain Best then continued on to Ceylon on 18 January, and then onwards to Sumatra, before returning to England around April 1614 without returning to India.

This event sufficiently impressed the Sardar (Governor) of Gujarat, who reported it to the Emperor. Thereafter the Emperor was more favourable towards the English than the Portuguese. Another factor that may have influenced him was that the Portuguese were very anti-Islam, and often harassed Mecca-bound pilgrim ships along the West coast of India.

The exact present day location of the port of Swally is unknown. The Times of India in an article dated 8 April 2003 reported that the Department of Archaeology of the University of Cambridge along with the Gujarat Ecological Society are planning a project to identify the port. It is estimated that the port is close to the modern day village of Suvali, 15–20 kilometres (9.3–12.4 mi) away from Surat.

The port was constructed by the English as they found it protected both from sudden squalls and military attacks. Besides, the English found it convenient to use the place for their early trade with Surat as Swally was navigable in low tides. There were several complications in using the ports at Surat as the French and the Portuguese also operated from there.[2]

Mr. R Sengupta, the Chief Project Co-ordinator (coastal and marine ecology) of GES advised that, "The port was also better than those located in the mouth of river Tapti. The English did not allow anyone to use the port at Swally and used to charge duty for permission to do so."[2]

Kerr, Robert (FRS. & FAS (Edin.)). A General History and Collection of Voyages and Travels, MDCCCXXIV, Vol. IX., Pt. II, Book III, Ch. X, Section XVIII.

Roe, Sir Thomas. The Journal of Sir Thomas Roe, Embassador from His Majesty King James the First of England to Ichan Guire, the Mighty Emperor of India, Commonly Called the Great Mogul; Containing an Account of His Voyage to that Country and His Observations There, London: Awnsham & John Churchill, 1704, First Edition. Quarto. 404 (757–812)pp